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Socio-Economic Status and Influencing Factors of Wage Discrepancy Among Ready-Made Garment Workers in Bangladesh: Evidence from Dhaka City

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Socio-Economic Status and Influencing Factors of Wage Discrepancy Among Ready-Made Garment Workers in Bangladesh: Evidence from Dhaka City Journal of Science and Technology, 8(1 & 2): 21-30, December 2018 SOCIO-ECONOMIC STATUS AND INFLUENCING FACTORS OF WAGE DISCREPANCY AMONG READY-MADE GARMENT WORKERS IN BANGLADESH: EVIDENCE FROM DHAKA CITY NAHIDA AFROZ1*, DELUAR J. MOLOY2 and ZAKIR HOSSAIN3 1Department of Statistics, Comilla University, Bangladesh 2Department of Statistics, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902, Bangladesh 3Department of Statistics, University of Dhaka, Bangladesh Abstract Ready-made garments (RMG) industry is the most important export-oriented sector in Bangladesh. The sector rapidly became important in terms of employment, foreign exchange earnings, and its contribution to the national economy. This study intended to explore and investigate the significant factors of discrimination of wages among garment workers and their socio-economic status. In this study, data have been collected through a two-stage cluster sampling design. A total of 240 garment workers were interviewed from eight areas in Dhaka city. From the analytical results, it is shown that most of the garment workers are from the rural areas of the country (90%) and female (60%). Moreover, they are poorly educated as 46% of them only have primary education and also young as 59% of their ages are less than 24 years. The female workers face wage discrepancy in case of higher salary as only 4% of female workers getting more than Tk.7000 monthly whereas this figure is 45% for male workers. It is also observed that age, gender, education, job status, work experience, beginning salary, working hour and over-time wage are found to be significant factors for the current salary of the RMG workers. Keywords: RMG, Wage discrimination, Export-oriented industry Introduction The industry of ready-made garments is one of the most potential and revenue earning sectors of Bangladesh. The standing of the RMG market is known worldwide. It was started in the late 1970s. Soon it became one of the major economic strength for Bangladesh. The RMG sector has added very much in earning foreign exchange, balancing export and import, huge unemployment problem for the country and empowerment of women along with giving them financial support. There is a rapid growth of industrialization in Bangladesh. Most of the manufacturing companies in Bangladesh are labor-intensive, particularly the ready-made garment industry. Therefore, *Corresponding author: [email protected] 22 Afroz et al. the practice of human resource management (HRM) is mostly required in labor-intensive industry like RMG. Moreover, there is a growing concern for labour rights among the garment workers in Bangladesh (Ahmed, 2001). Wage disparity between male and female workers in the RMG sector has increased during the recent years as salary growth of male laborers is comparatively high according to a survey conducted by the Centre for Policy Dialogue (CPD). The RMG sector has started its journey in the late 1970s in Bangladesh. However, Bangladesh experienced a real momentum in the RMG sector between the mid-1980s and mid-1990s (Robbani, 2000). The first garment factory in Bangladesh was established in 1960 at Dhaka (Islam et al., 1984). Bangladesh started exporting garments in 1976. The first joint venture garment factory in Bangladesh was Desh garment in association with Daewoo, a South Korean company (Rock, 2001). In the 1980s there were only 50 factories employing only a few thousand people. Day by day the rates of workers were increasing. Currently, there are about 4500 manufacturing units. The RMG sector contributes around 80% to the export earnings, and above 4 million people is engaged. (Department of Inspections for Factories Establishments Ministry of Labor and Employment, 2015). The garment sector has provided employment opportunities to women from the rural areas that previously did not have any opportunity to be part of the formal workforce. This has given women the chance to be financially independent and have a voice in the family because now they contribute financially. Before 2010, the percentage of men and women workers are may like the same, but in the present situation, women's participation is increasing day by day. Akterujjaman and Ahmad (2016) showed that employees’ satisfaction (wages provided on time, incentive, meal allowance, and transport facilities) is the most supremacy part of increasing productivity in any sector of the industry. Hewett and Amin (2000) focused on the impact of the quality of life among young garment workers in Bangladesh. Quality of life is assessed across a broad range of indicators including living conditions, health, and patterns of income and savings. Ahamed (2013) also showed that more than 78% of Bangladesh export earnings come from the garment industry. The RMG sector has a greater potential than any other sectors in terms of employment and foreign exchange earnings to reduce poverty and make a contribution to the national economy. Jamil et al. (2006) found that reduction or elimination of gender-based wage discrimination is the greatest gift of globalization for Bangladesh. International law and convention and non- government organizations efforts have taken Bangladeshi women into a new era. The socio-economic condition of the female garment workers was assessed in Dhaka city (Sikdar et al., 2014). Female workers were selected as a sample because of their high percentages of participation as production workers in RMG factories. The survey covered a total number of 80 respondents, which were drawn from 10 garment factories situated Socio-Economic Status and Influencing Factors OF Wage Discrepancy 23 in different locations of Dhaka metropolitan area using a convenient sampling technique. Compensation, promotion, and performance evaluation have a positive impact on overall organizational performance (Huselid, 1995). Majumder and Begum (1999) also showed that women employment in export-oriented industries had narrowed the gender gap in many spheres including participation in the labor force, social prestige, control over income and decision making in Bangladesh. At the same time, there is widespread occupational segregation and gender discrimination in wage rates. In this study, we investigate the socio-economic condition and significant factors of wage discrepancy among RMG workers incorporating the gender-based discrimination in terms of wages and opportunities in the industry. Materials and Methods Study Population The study population is all the ready-made garment workers in Bangladesh. Among all RMG factories, 65% are located in Dhaka zone, 14% in Chittagong zone and the reaming 21% are in other divisions (BGMEA: Bangladesh Garment Manufacturers and Exporters Association). As it is difficult to collect information from many workers in RMG factories in different zones in Bangladesh, we only consider the Dhaka zone to collect data from the garment workers. Data and Variables Data have been collected from the RMG workers by visiting their households. We consider ‘Location' which represents the geographical area of the residence of factory workers and ‘Time' represents the period of time when the factory workers are available at their residences. Thus, locations are designed as clusters, and two-stage cluster sampling has been used for the selection of the required number of factory workers. In the first-stage, the sampling unit is considered as a village or mahalla, and the second stage sampling unit is the garments worker. In the first stage, 8 areas are randomly selected from the list of 20 areas, and these are: Adabor, Badda, Mirpur, Rampura, Banani, Mohammadpur, Gulshan and Khilgaon. In the second stage, a total of 240 workers were selected for the interview and used their information for the analysis. In this study the response variable is the current monthly salary of the RMG workers in Bangladesh. Based on the literature review, the socio-economic and demographic variables of interest are selected and these are: age, gender, marital status, residential status, family size, education, parents occupation and education of the workers, job status, work experience, beginning salary, monthly remuneration, monthly expenditure, sickness allowance, working hour per day and over-time wages of the RMG workers. In this study, the univariate, bivariate, and multivariate analysis have been performed for 24 Afroz et al. investigating the socio-economic status and influencing factors of wage discrepancy among RMG workers in Bangladesh. Results and Discussion Demographic and Socio-economic Characteristics From the univariate analysis, it is observed that about 23% of workers age lie between 15 to 19 years, 36% of workers age lie between 20 to 24 years, 25% of workers age lie between 25 to 29 years, 10% of workers lie between 30 to 34 years, 5% of workers age lie between 35 to 39 years and only 1% of workers age lie between 40 to 44 years. About 84 percent of workers age lie between 15 to 29 years, and the average age of the respondents is 23.70 years. It is also observed that more than half of the workers (60%) are female. Respondent’s marital status influences his or her way of life and role in the household and community. From data we observed that half of the workers (50%) are married and the rest of the percentage are unmarried, widowed and divorced. The analysis of the findings reveals that 90% of the workers are from rural areas in the country. Family structure represents the socio-economic condition of the respondents. From Table 1, it is observed that
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